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Sensitivity Table, Levered IRR

Shades a five-year levered-IRR grid across annual rent growth and exit cap rate by whether each cell clears a chosen return floor, using modeled outputs from the course’s worked deal. The input is the return floor, since the underlying IRR grid is fixed to the chapter example.

By Devon Coombs, CPA, MBA · Teaching Professor of Finance, Santa Clara University · Reviewed August 2026

From the author: Devon Coombs, CPA, MBA teaches finance at Santa Clara University and works with corporate teams on practical AI.

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Sensitivity Table, Levered IRR

Return floor (hurdle)

22 of 25 scenarios clear the 10.0% floor. Green clears; red falls short; the amber-ringed cell is the base case.

Rent \ Exit cap5.50%5.75%6.00%6.25%6.50%
2.0%15.9%13.9%11.9%9.9%7.9%
2.5%17.2%15.2%13.2%11.3%9.3%
3.0%18.4%16.5%14.6%12.6%10.8%
3.5%19.6%17.7%15.8%14.0%12.1%
4.0%20.8%18.9%17.1%15.3%13.5%
Highlight the base case (3.0% rent growth, 6.00% exit cap → 14.6%) but make the stress cases easy to find. At a 6.50% exit cap and 3.0% rent growth the IRR is 10.8%, still above a 10% floor, but thin. Read “What happens if we are wrong?” directly off the grid.

Learn the concept

This calculator comes from the free Real Estate Finance course, where the concept is taught with readings, worked examples, and practice questions.

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Built by Devon Coombs, CPA, MBA, Teaching Professor of Finance at Santa Clara University.